How Much Can Be Disclaimed
Joint tenancy and similar forms of co-ownership come with a built-in feature: when one holder dies, the survivor automatically receives the deceased holder's share. But that automatic transfer is not mandatory. Under this statute, the surviving holder can refuse some or all of the inherited interest.
On the death of a holder of jointly held property, a surviving holder may disclaim, in whole or in part, the greater of either: 1. A fractional share of the property determined by dividing the number one by the number of joint holders alive immediately before the death of the holder to whose death the disclaimer relates. 2. All of the property except that part of the value of the entire interest attributable to the contribution furnished by the disclaimant.
A.R.S. § 14-10007(A)The statute provides two calculation methods and allows the survivor to disclaim whichever amount is greater. The first method divides the property equally among the number of holders who were alive just before the death. The second method lets the survivor keep only the portion they personally contributed and disclaim the rest. This flexibility matters in situations where joint holders contributed unequal amounts to the property.
When the Disclaimer Takes Effect
A disclaimer under this section takes effect at the moment of the deceased holder's death. The law treats the disclaimed interest as if the surviving holder predeceased the person who died. That means the disclaimed portion passes to whichever beneficiary or heir would have received it had the surviving holder not been alive.
This can be a powerful tool for tax planning and estate distribution. For example, if a surviving spouse disclaimed their survivorship interest in a jointly held account, the funds could pass to a trust or to the next generation, potentially reducing estate tax exposure or preserving eligibility for certain benefits.
